Some Chinese AI chip companies are now designing less powerful processors to retain access to Taiwan Semiconductor Manufacturing Co (TSMC) production in the face of US sanctions, four people with knowledge of the matter said, reports Reuters. Aiming to impede breakthroughs in artificial intelligence and supercomputing by China’s military, Washington has imposed a series of export controls on highly sophisticated processors from companies such as Nvidia and on chip manufacturing equipment. Those restrictions also prevent TSMC—which uses US chipmaking tools—as well as other overseas chip manufacturers from taking orders to produce them.
The most recent set of US export controls imposed last October have exposed just how limited China’s production capacity for advanced chips is and how dependent Chinese AI chip design companies are on TSMC—the world’s leading chip contract manufacturer, the sources said.
Two top Chinese AI chip firms, MetaX and Enflame, submitted downgraded designs of their chips to TSMC in late 2023 to comply with US restrictions, according to two of the people.